En­ter­prise re­source plan­ning

Finweek English Edition - - Communication & technology - BENE­DICT KELLY

THE EN­TER­PRISE re­source plan­ning sys­tem (ERP) forms the heart of most mod­ern com­pa­nies. From large multi­na­tion­als to mu­nic­i­pal­i­ties, the con­cept of a cen­trally or­gan­ised sys­tem to con­trol what hap­pens inside a com­pany lies at the core of its IT in­fra­struc­ture.

Find­ing a clear def­i­ni­tion for ERP is al­most im­pos­si­ble. Many re­fer to the man­u­fac­tur­ing roots of the prod­uct, but as a con­cept it’s moved far be­yond the man­u­fac­tur­ing arena. The con­cept be­hind an ERP sys­tem is to bring all the var­i­ous sys­tems com­pa­nies use un­der one um­brella. If you were mak­ing wid­gets you’d want to know what raw ma­te­ri­als were be­ing con­sumed, how many were be­ing man­u­fac­tured and to whom they were be­ing sold. That was the orig­i­nal aim of ERP.

To­day it’s a sys­tem in­tended to run al­most ev­ery as­pect of the mod­ern busi­ness, from HR to fi­nances from or­der­ing pen­cils to the de­liv­ery of fin­ished goods worth mil­lions of rand.

Just as you might ar­gue there’s no point when buy­ing a home theatre sys­tem to in­di­vid­u­ally pick out an am­pli­fier, DVD player and speak­ers when you can buy one sys­tem with all those fea­tures. So go­ing to one soft­ware sup­plier makes buy­ing and man­ag­ing sys­tems sub­stan­tially eas­ier.

The prob­lem is that while the idea of one sys­tem makes sense, in prac­tice the big ERP ven­dors – such as SAP and Or­a­cle – don’t pick up on emerg­ing trends, leav­ing small com­pa­nies to fill the gaps.

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